Politics

Today (Friday April 18) it has been revealed the CBI has registered with the Electoral Commission as a backer of the NO campaign against Scottish independence.

Responding to the news Martin McAdam, Chief Executive Officer of wave energy company Aquamarine Power (a member of the CBI) said:

“Businesses do not vote, people vote. The CBI has registered with the Electoral Commission as a NO campaign backer without consultation with its members. As a business Aquamarine Power has been firmly neutral on the matter of independence. We have adopted this view after consultation with our Board and Management Team and as a consequence we can no longer remain members of the CBI. Although Aquamarine Power’s staff and Board Members may have personal views on the matter of independence, this has no influence on our agreed company position.”

A report by energy regulator Ofgem has today warned that the gap between installed capacity and electricity demand could fall to just 2% in coming years. The report also warns that the risk of blackouts from lack of supply has increased since their last report and could reach a one in every four years if reductions in demand are not achieved, compared to the current level of once in ever forty seven years currently.

With Scotland currently exporting 26% of electricity generated, the key role played by Scotland in keeping the rest of the UK’s lights on will become even more important in years ahead as the capacity gap narrows. This reliance on Scottish electricity effectively undermines claims by anti-independence politicians that the rest of the UK would not want to purchase electricity from an independent Scotland, as the risk of blackouts in the rest of the UK would increase significantly without electricity crossing the border.

“This paper has revealed just how tight the gap between electricity capacity and demand is set to become and makes a mockery of claims that the rest of the UK would not continue to buy electricity produced in Scotland after a Yes vote. The energy resources that Scotland is home to are absolutely essential to keeping the lights on in the rest of the UK and this report from Ofgem shows why they will only become ever more vital in the years ahead.”

“It blows a major hole in some of the more outlandish scaremongering we have heard from anti-independence politicians when it comes to energy, and has severely undermined their credibility.

“The fact is that the rest of the UK needs Scotland’s electricity and that will still be the case after a Yes vote in next year’s referendum. Maintaining a shared energy market between an independent Scotland and the rest of the UK is simply good sense for everyone concerned.

“Scotland’s rapidly growing renewable energy supply is absolutely integral to maintaining a secure supply of electricity south of the border and today’s report means that fact is indisputable.”

The UK Government announced its intention today to consult in the summer on additional support for renewables projects located on islands (where these have clearly distinct characteristics to typical mainland projects). This is on a timetable to allow a differential strike price to be set for these projects in the final Delivery Plan in December.

“I’m delighted that the UK government has now accepted our arguments for addressing the challenges island generators face and has announced its intention to work with us to deliver effective and targeted market support for island renewables developers.”

Should there be a moratorium on offshore wind?

Speaking in Edinburgh yesterday UK Energy Secretary Ed Davey said the future of Scottish renewables “is more secure with Scotland as part of the United Kingdom”.

His contention is that if Scotland became independent it would be “treated by the UK as just one of a number of countries it could buy renewables from”.

Davey went on to say: “We are pursuing a number of interconnection projects with our European neighbours, including Norway and Ireland. For an independent Scotland, this would potentially represent serious competition. If the UK were to look beyond its borders for renewable energy, we would need to consider which sources provide the cheapest and most reliable options for our people.”

Scotland has been a major exporter of electricity to England for decades. This has been done via 2,200MW capacity interconnectors linking the Scottish Grid to the English Grid which are being upgraded to 3,300MW. Plans are also in place to increase the interconnector capacity to 7,000MW by 2021. There is every likelihood that the rUK would find it economic to purchase some of Scotland’s excess capacity compared to the cost of power imported through expensive sub-sea HVDC interconnectors. However, this electricity must be competitive, and while onshore wind is becoming very competitive onshore wind still looks prohibitively expensive.

Meanwhile, the think tank ‘Options for Scotland’, set up by former SNP leader Gordon Wilson, has published a report looking into an independent Scotland’s energy options – and one point among its key recommendations chimes with Davey’s remarks. The report contends that offshore wind is an expensive and unnecessary source of power for an independent Scotland that already has substantial overcapacity, and that under independence there would be no guaranteed export market for such expensive power.

Both the anti-wind brigade and the unionist media have – naturally – seized on this report as a stick to beat the Scottish government without having read it fully. While realising that we will have legally binding emissions targets to meet, the report suggests that the ‘100% from renewables’ target may be impractical in the immediate future following independence but that:

“If Scotland does embark on a policy of aiming for lowest cost electricity, and has to produce 40% of its electricity from renewable sources, the obvious move is to concentrate on onshore wind.”

More State involvement in planning and executing future electricity generation, including a possible state-owned generating company.

Scale back the 100% by 2020 target on carbon emissions and concentrate on lowest cost electricity, with production for export considered only when a profitable market beneficial to the Scottish consumer exists.

Use the Crown Estate to control development and have a moratorium on new offshore wind.

Return ownership and control of the Scottish grid to Scotland.

Abandon the FiT scheme as non-economic.

On the basis of overcapacity, suspend any consideration of nuclear.

Implement research and commissioning of carbon storage (CCS)

Increase investment in research and industrial development of potential wave and tidal flow marine energy.

Expand conventional hydro under a state company with an option to acquire privatised hydro stations on payment of reasonable compensation, given exploitation of unjustified subsidies.

It will be interesting to see how the Scottish government respond to this report. Hopefully it will form a basis for constructive discussion rather than being used as nothing more than casual ammunition in the referendum debate.

Norwegian state involvement could jeapordise NorthConnect project

It seems that a proposal being put forward in Oslo to put the state-controlled grid operator Statnett in charge of all Norwegian interconnector projects could potentially stall or finish off the development of a North Sea HVDC interconnector between Scotland and Norway.

While Statnett currently has no interest in NorthConnect it does have a stake in other interconnector projects, including the North Sea Network (NSN) joint venture with National Grid. This project proposed to build an interconnector line between Northumberland and Western Norway, which would bypass Scotland and could damage the country’s hopes of being a major renewable energy exporter in the future.

This warning was given by Ødd Oygarden, who is the chairman of NorthConnect, the consortium behind the project. Oygarden said: “We will have to see what will happen with the Norwegian government’s proposition. If it goes ahead – You can take it that [cancelling the NorthConnect project] might be a possible development. The government suggesting that there should be a near-monopolistic situation with interconnectors is not what we want as a background for reaching agreements.”

This is the second bit of bad news for the project this month after it emerged that SSE, a major partner with a 25% in the consortium, was withdrawing to concentrate on other business. It cited a ‘lack of clarity on the regulatory regime around interconnectors’ for its decision to withdraw. The NOrwegian government has done little to promote such clarity with its somewhat opaque statement that “Grid investments shall be conducted if they are socio-economically profitable. This includes new interconnectors.”